Star Wars Revenue: Disney’s New Hope

Disney’s ESPN faces another challenge, and this time it’s not cord cutting. Facebook is moving into sports content.

According to re/code, Facebook users will be able to get “play-by-play updates, live stats and expert commentary … all inside of Facebook.”

This social media sports content can only put more pressure on ESPN, which provides live updates through its ESPN Gamecast tablet app.

ESPN is known for authoritative sports reporting and the depth of expertise that hardcore sports fans expect.

But it’s not clear whether that reputation will be enough to withstand the challenge by Facebook, which says it will draw on sports experts among the platform’s 1.5 billion active users for commentary.

ESPN represents about 75 percent of Disney’s cable revenue, according to the Wall Street Journal. With competition coming from the likes of Facebook, the question is whether ESPN will be able to add subscribers going forward to maintain, or even grow revenues.

Updated 04Jan16

The buzz around Star Wars has only escalated since we shot this piece on the first day that The Force Awakens hit cinema screens last month.

Sentiment towards Disney’s stock ticker was bullish just ahead of the release of the new film on expectations that Star Wars mania would help offset expected weakness in the company’s cable network operations. Since then, the new installment has proven its ability to print money. The Force Awakens was the biggest cinema debut in history in terms of revenue.

Of course, one film won’t replace the loss of cable revenue that’s expected as more people cut their cable feeds and opt for streaming media offered through services such as Netflix and Apple TV. That’s why it’s so important for Disney to turn the franchise into a pipeline of films that will keep the box office sales and marketing deals flowing, and probably why the next installment is due in less than a year. Four more beyond that already have tentative release dates.

The force of Star Wars enthusiasm may not be strong enough to save Disney afterall.

The future of Disney is riding on the force of Star Wars mania. In the era of cord cutting and with ESPN subscriber numbers tipping into decline, revenue from the film franchise comes just in time. Will it offset the loss of cable network earnings?

We looked at what the investment community is saying about Disney on social media. Here’s the full story…

Robert Delaney

Robert Delaney is VP Managing Editor at /newsrooms. He has worked for financial news networks including Bloomberg News and Dow Jones in Asia and North America. He has also done graduate research in communications and international relations. Robert is a big fan of all of the folks at /newsrooms, who have helped him understand how to apply the standards of academic research and financial news to social media.